acalculator

Break even point: how many to sell?

Type your fixed costs, your price per unit and what each unit costs you. The break even point calculator shows how many units you must sell, and the sales in dollars, to cover your costs.

Your numbers

Units to sell
225

Units to sell: 225, or $22,500.00 in sales, to cover your fixed costs and target profit.

Units (exact)
225
Sales in dollars
$22,500.00
Contribution margin per unit
$80.00
Contribution margin ratio
80%
Profit at the whole units
$0.00

Units to sell: 225. Units to sell: 225, or $22,500.00 in sales, to cover your fixed costs and target profit.

Profit at each number of units

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes the break-even point in units and in sales dollars from fixed costs, price per unit and variable cost per unit, or the units to sell for a target profit.

Example with the default inputs (Fixed costs $18,000.00, Price per unit $100.00, Variable cost per unit $20.00, Target profit $0.00): Units to sell: 225, or $22,500.00 in sales, to cover your fixed costs and target profit.

Method: Contribution margin = price − variable cost; break-even units = (fixed costs + target profit) ÷ margin, rounded up; sales dollars = (fixed costs + target profit) ÷ (margin ÷ price).

  • Price, variable cost per unit and fixed costs stay the same at every level of sales in the period.
  • Every unit made is sold. Taxes are left out.
  • Fixed costs, price and target profit are for the same period (a month or a year).

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Fixed costs $18,000.00, Price per unit $100.00, Variable cost per unit $20.00 gives Units to sell 225, Units (exact) 225, Sales in dollars $22,500.00, Contribution margin per unit $80.00, Contribution margin ratio 80%.Source: OpenStax, Principles of Accounting, Volume 2: Managerial Accounting, §3.2 Calculate a Break-Even Point in Units and Dollars. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars (fixed costs $18,000, price $100, variable cost $20: 225 units or $22,500)
  2. Fixed costs $14,000.00, Price per unit $400.00, Variable cost per unit $150.00 gives Units to sell 56, Sales in dollars $22,400.00, Contribution margin per unit $250.00, Contribution margin ratio 62.5%.Source: OpenStax, Principles of Accounting, Volume 2: Managerial Accounting, §3.2 Calculate a Break-Even Point in Units and Dollars. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars (fixed costs $14,000, charge $400, variable cost $150: 56 returns or $22,400)
  3. Fixed costs $16,800.00, Price per unit $1,250.00, Variable cost per unit $850.00 gives Units to sell 42, Sales in dollars $52,500.00, Contribution margin ratio 32%.Source: OpenStax, Principles of Accounting, Volume 2: Managerial Accounting, §3.2 Calculate a Break-Even Point in Units and Dollars. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars (fixed costs $16,800, price $1,250, variable cost $850: 42 units or $52,500)
  4. Fixed costs $3,000.00, Price per unit $35.00, Variable cost per unit $20.00, Target profit $1,000.00 gives Units (exact) 266.666667, Units to sell 267, Sales in dollars $9,333.33, Profit at the whole units $1,005.00.Source: OpenStax, Principles of Accounting, Volume 2: Managerial Accounting, §3.2 Calculate a Break-Even Point in Units and Dollars. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars (target profit: (fixed costs + desired profit) ÷ contribution margin per unit)

How it works

  • Contribution margin per unit = price − variable cost per unit. It must be more than 0; otherwise there is no answer.
  • Contribution margin ratio = margin ÷ price, shown as a percent.
  • Units (exact) = (fixed costs + target profit) ÷ margin. With no target profit this is the break-even point.
  • Units to sell = the exact units rounded up to a whole unit.
  • Sales in dollars = (fixed costs + target profit) ÷ margin ratio = exact units × price.
  • Profit at the whole units = margin × units to sell − fixed costs.

Every step is an exact fraction of the amounts you type; each output is rounded once. Units show with at most 2 decimals, dollars to the cent and the ratio with at most 2 decimals, rounded half up. The chart draws profit = margin × units − fixed costs from 0 to twice the exact units, with a marker at the exact units (where profit equals the target).

Assumptions

  • Price, variable cost per unit and fixed costs stay the same at every level of sales, and every unit made is sold (OpenStax's cost-volume-profit assumptions). Taxes are left out.
  • Fixed costs and target profit are for one period, such as a month. All amounts are from $0 to $1,000,000,000,000; the target profit is 0 when left empty.

Worked examples by hand

Hicks Manufacturing (OpenStax). Margin 100 − 20 = $80; ratio 80 ÷ 100 = 80%; 18,000 ÷ 80 = 225 units; 18,000 ÷ 0.80 = $22,500.

Marshall & Hirito tax returns (OpenStax). Margin 400 − 150 = $250; ratio 62.5%; 14,000 ÷ 250 = 56 returns; 56 × 400 = $22,400.

Channing's Chairs (OpenStax). Margin 1,250 − 850 = $400; ratio 32%; 16,800 ÷ 400 = 42 units; 42 × 1,250 = $52,500.

A hair salon with a $1,000 target profit. Margin 35 − 20 = $15; (3,000 + 1,000) ÷ 15 = 266.67 units, so 267 haircuts; sales 266.67 × 35 = $9,333.33; profit at 267 = 15 × 267 − 3,000 = $1,005.

Other questions people ask

How do I calculate the break even point?

Divide fixed costs by the contribution margin per unit (price − variable cost). With $18,000 of fixed costs, a $100 price and a $20 variable cost, the margin is $80 and the break-even point is 18,000 ÷ 80 = 225 units.

How do I find the break-even point in sales dollars?

Divide fixed costs by the contribution margin ratio (margin ÷ price). In the example the ratio is 80 ÷ 100 = 80%, so sales must reach 18,000 ÷ 0.80 = $22,500, the same as 225 units × $100.

What is a contribution margin?

It is what each unit sold adds toward fixed costs and profit: price minus variable cost per unit. A $35 haircut that costs $20 in supplies and pay has a $15 margin.

How many units do I need for a target profit?

Add the target profit to the fixed costs and divide by the margin. For $1,000 of profit on $3,000 of fixed costs and a $15 margin: 4,000 ÷ 15 = 266.67, so sell 267 units.

Why is the answer rounded up?

You cannot sell part of a unit. 266.67 units falls short, so the calculator shows 267, which covers the costs with a little profit left over. The exact figure is shown too.

What if my price is lower than my variable cost?

Then every sale loses money and no amount of sales breaks even. Raise the price or cut the variable cost so that the margin is above zero.